US, Canada race to finalize trade deal before Saturday tariff deadline

Negotiators from the United States and Canada are working through Friday to finalize a trade agreement before 50% tariffs on roughly $20 billion worth of Canadian goods take effect at 12:01 a.m. ET Saturday. Canadian Trade Minister Dominic LeBlanc said Thursday that the two sides are "very close" after more than three hours of talks with U.S. Trade Representative Jamieson Greer in Washington, but emerged without a completed deal in hand.cnbc+1

The tariffs, invoked under Section 338 of the Tariff Act of 1930, were originally set to take effect on August 19. President Trump announced a three-day postponement late Tuesday after what he described as a "good conversation" with Prime Minister Mark Carney, saying the two countries had a deal "subject to the finalization of documents."pm+1

What's on the Table

According to sources familiar with the negotiations, the proposed agreement would reduce U.S. tariffs on Canadian steel and aluminum from 50% to 25%, and cut the tariff rate on Canadian-built vehicles from 25% to 15%. U.S. officials have circulated a draft text of the deal, though sticking points remain over the scope of reductions on steel, aluminum, and lumber — three sectors hit hardest by Trump's trade actions over the past year.youtube+3

Trump said Wednesday that Canadian tariffs on American farmers "will be nonexistent," while U.S. Agriculture Secretary Brooke Rollins described dairy access as the administration's top priority in the talks. Canada has not confirmed those claims.bnnbloomberg+1

Provincial Politics and Alcohol Diplomacy

As a goodwill gesture tied to the tentative deal, Canadian provinces have agreed to return U.S. alcohol to store shelves after months of a retaliatory ban. But Manitoba Premier Wab Kinew urged Canadians to keep buying domestic products. "If we put the booze back on the shelves, don't buy it," Kinew told reporters in Winnipeg.bnnbloomberg

Conservative House Leader Andrew Scheer expressed concern that Carney may be conceding too much. "If he comes back with a deal where there's still 25% tariffs on steel and aluminum, there's going to be a lot of workers across the country scratching their heads," Scheer said.bnnbloomberg

The Stakes

LeBlanc's office confirmed he would spend Friday night in Washington ahead of continued negotiations. "Canadians expect us to get a deal that's in the economic interest of Canada and Canadian workers," he said Thursday. If talks collapse, the 50% duties on Canadian hockey sticks, wine, dairy, automotive products, and other goods would represent one of the largest trade barriers between the two countries in modern history.cryptobriefing+1